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The lack of independent entrepreneurship in furniture is the biggest headache for furniture exports
China’s furniture manufacturing industry is primarily concentrated in South China, East China, North China, and Northeast China. Among these regions, Guangdong and other coastal areas account for the highest volume of furniture exports. Zhang Jingping, head of Green Island Furniture Direct, noted that the Pearl River Delta currently dominates the nation’s total furniture exports, making up over half of the country's total exports. Prior to 2008, many domestic furniture companies enjoyed substantial profits from their export businesses. However, since then, the international market environment has shifted significantly. Many European distributors have gone out of business, drastically reducing export volumes. Despite this, Zhang emphasized that the issue isn’t the absence of profit but rather a decline in profitability compared to previous years. Additionally, furniture exporters in cities like Beijing have seen slower growth in recent times.
One of the main challenges facing the furniture export sector is the lack of independent, branded products. Companies that once heavily relied on export volumes have started adjusting their strategies. For instance, one company that previously saw exports account for 50% of its total sales now sees exports representing less than 20%. Chairman Qiao Yinjun explained that until recently, most exports consisted of sofas destined for over 70 countries. The decline in export business is largely due to changes in the global market and the growing domestic demand. Qiao admitted that exporting furniture without a strong brand presence remains a significant challenge for Chinese companies. Most have acted as passive manufacturers, fulfilling orders from foreign distributors. As global purchasing power for furniture wanes and domestic production costs rise, profits from exports have diminished.
Nevertheless, Qiao stressed that the company continues to pursue overseas exports, even if margins are slim. Engaging with foreign clients and designers allows the company to stay ahead of trends, improving both product design and R&D efforts. Exporting to developed markets with stringent quality standards also helps enhance product quality. Currently, the same production lines are used for both domestic and export goods, ensuring consistent quality across all markets. Qiao believes that continuing to export ultimately benefits domestic consumers by driving innovation and quality improvements.
When asked about the shrinking export business, Wu Nanni, Vice President of Qumei Furniture, noted that their company has maintained a relatively low export ratio, around 10%, despite setting up a dedicated export division. Qumei focuses on domestic sales through its self-designed and produced models. Wu remarked that there remain untapped opportunities within the domestic market, suggesting that shifting focus away from the domestic scene is premature. Their export strategy involves partnering with foreign retailers to establish Qumei-branded stores, but Wu indicated there are no immediate plans to expand exports further.
Wu outlined several reasons behind the slowdown in Chinese furniture exports, including rising domestic production costs and uncompetitive pricing. Another obstacle is the lack of strong, independent brands. Products often lack unique technical features or distinct styles, making them less appealing in competitive markets. Wu pointed out that in certain developed countries, consumer expectations for quality are extremely high. To succeed in such markets, companies must build their own brands alongside maintaining superior product quality. This dual approach could drive significant growth.
Overall, while the furniture export sector faces numerous challenges, companies are adapting by focusing more on domestic markets and investing in innovation. Export activities, though less profitable, continue to play an important role in enhancing product quality and fostering international exposure.